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Monday, 09 January 12
2012: WHAT WILL IT BRING FOR THE DRY BULK MARKET? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 A further increase in dry bulk demand could be the remedy for most of the industry's oversupply issues, together of course with the high level of scrapping activity, as observed during the course of 2011. According to the latest BIMCO report on 2012, a large part of this increase in demand could come from India and its coal needs. The report said that "the year 2011 had barely started before a series of unforeseen events took place across the globe. Most of them affected dry bulk shipping negatively and the large Capesize vessels were particularly under pressure. Amongst the events were the flooding in Australia and South Africa, the triple disaster in Japan and the “Arab Spring” that also affected the supply of oil into Europe.
Half a year down the road, during which many Capesize vessels had earned less than any other dry bulk vessel size, the unexpected happened again. Strong demand for iron ore and coal from China and the recovering Japan, sourced from Brazil and Australia, ignited freight rates for Capesize vessels. A tight tonnage situation in the Atlantic basin combined with increased congestion in loading and discharging ports pushed average rates above USD 30,000 per day.
A far cry from the peaks of the super cycle, but surely an indication of the peak levels we have in sight for the near- to mid-term future as the supply side remains a considerable burden for the industry. The demand side is set to be relatively stable in 2012 although it’s likely to grow somewhat slower than in 2011 – at least in volume terms. Overall iron ore demand is likely to slow. Still, a lower world market price as compared to the domestic costs of mining it within China holds the key to provide positive demand shocks for this valuable steel ingredient. Growing demand for thermal coal from large Asian consumers is said to be a steady demand driver" said BIMCO.
In a separate research report on the outlook of the dry bulk industry, DVB Bank said that the current dry bulk fleet now stands at 8,877 vessels (585.1mio dwt). The average age of the fleet is about 12 years and 59.1% of the fleet is less than 10 years of age. In addition, the average age of vessels less than 10 years old is merely 2.8 years – a very young fleet. Similarly, the orderbook stands at 2,371 vessels (196.3mio dwt) which equates to 33.6% of the current fleet. In dwt terms, large Capes constitute the largest portion of the current fleet while Panamax size vessels have the largest Orderbook. ULBC size range is expanding substantially. So far, three of the 34 Vale ULBCs of 400K+ dwt have delivered.DVB Bank said in its analysis that if the remaining 31 vessels actually deliver, this will have a huge negative impact on all large Cape asset values as well as T/C rates and impact earnings of other Sub-Sectors as well.
Looking at deliveries, a total of 366 vessels of 28.3 million dwt are still headed towards delivery, according to figures up to November of 2011. These vessels represent 14.4% of the orderbook. Given that for the most part these weren't expected to be delivered within 2011, the researcher said that they will be rolled over to 2012. So, it draws the conclusion that "even Even with 40% delays due to slippage, postponement and cancellation, we are poised to cross the 100mio dwt mark this year. In 2012, some 1,431 vessels (121.6mio dwt) are scheduled for delivery, which is about 62% of the current orderbook" said DVB Bank.
In total the dry bulk cargo demand is forecast to rise to approximatly 3.7 billion tons this year. But, as DVB states, the level of the orderbook is too much for it to be absorbed without problems and downward pressure both on ship values and freight rates. "Although scrapping picked up in 2011 to 21.4mio dwt (334 vessels) as of November, this figure is merely 3.5% of the existing fleet" said DVB Bank. It concluded that the vessels which were ordered at the peak of the market back in 2007-2008 should add to distressed asset sales, as their owners won't be able to repay them without huge losses. In essence, the researcher said that the current slowdown will see many ship owners out of the market and bankrupt, due to cash flow problems, as at the moment, they don't have the necessary cash reserves to survive the downturn, like they did back in 2008.
BIMCO's advice towards dry bulk ship owners they should expect the unexpected, as has been the lesson learned. "Maybe even India will begin to influence the market as a significant importer. This would fulfil the prophecy and release a vast potential that has been simmering for a very long time and provide a much-needed second major demand driver. Supplementing China as the dominant factor in the market would create a more sustainable freight market going forward. However, this will not happen in just one year; moreover it appears destined to remain a long and dusty road for several years to come. An optimist would surely name India as the best thing that could happen to the dry bulk shipping industry. In the meantime volatile iron ore exports and strong demand for thermal coal is likely to characterise India’s contribution to the dry bulk markets" concluded the organization.
Source: Nikos Roussanoglou, Hellenic Shipping
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Wednesday, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
Tuesday, 10 January 12
THE 4TH DEEPWATER ASIA CONGRESS 2012 WILL KICK OFF ON MAY 23 - 25
Press release - Based on the past three years’ success, SZ & W Group is excited to announce the 4th Deepwater Asia Congress will be held o ...
Sunday, 08 January 12
ICICI OUTLOOK ON INDIAN POWER, MINING,CEMENT, AND SHIPPING SECTORS PERFORMANCE IN 2012
Broking firm, ICICIdirect (India) has come out with report on sectors outlook for 2012. IRIS has collated key highlights for each sector from ...
Sunday, 08 January 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7000 PER DAY - VISTAAR
Wish You a Very Happy and Prosperous New year 2012.
COALspot.com - The last report by us was on 16th Dec 2011 and because of holidays this would ...
Sunday, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
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- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Posco Energy - South Korea
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- The University of Queensland
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
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